Overview
- Fitch announced on Friday that it will keep France's sovereign rating at A+ with a stable outlook, saying it does not expect to change the rating in the near term.
- France's growth picture has worsened with the government cutting its 2026 forecast to 0.7% and Insee revising Q1 GDP to -0.2% and Q2 to flat, reducing fiscal room for the state.
- Market pressure has increased borrowing costs: French 10‑year yields climbed above 4% in mid‑August, the highest level since 2008, which raises the bill to refinance public debt.
- The government must set a final pre‑election budget while operating without a parliamentary majority and face politically charged proposals on debt management, including a plan from Jean‑Luc Mélenchon to cancel part of the debt.
- Moody's will review France on October 23 and S&P on November 27, and the agencies could downgrade or lower outlooks if growth weakens further or debt‑servicing costs continue to rise.